08 December 2016

A government crisis in Italy?

After the No vote in the referendum on constitutional reforms Prime Minister Matteo Renzi tended his resignation to President Mattarella. However, he will stay in office until a new governement takes over. Commentators fear that Italy's problems are insurmountable and call for new elections, but only under certain conditions.

Italy's problems virtually insurmountable

Italy has taken over from Greece as the new "sick man" of the EU, comments Új Szó:

“Italy has had 63 governments since 1946. This has to do with the political system that sets tight limits on the government because of the experiences with fascism under Mussolini. … The structure of this system renders economic and political reforms virtually impossible. … Within the EU only Greece has a higher level of public debt. The Italian banks need to recover loans amounting to an unbelievable 360 billion euros. … In addition to the economic problems the country has also been dogged by floods and earthquakes. … We have seen how much effort rescuing Greece has entailed. In Italy the problems are so huge that a financial bailout package, no matter how large, will hardly help.”

Avoid premature elections

New elections make sense but not at any cost, writes Corriere della Sera:

“The disputes that dominated the referendum campaign must not be continued as if a parliamentary election were just the next round in the fight of recent months. There is a huge difference between prompt elections that are desirable and premature elections, which must be avoided at all cost. The former would take place once the tensions among the parties have dissipated, the country is reconciled and a new electoral law has been passed that adheres to the rules set out by the Constitutional Court and restores the balance between the parliament and the Senate. … In the latter case the country would go to vote more divided than ever. … And above all we would run the risk of ending up with a parliament that is the result of an election campaign driven by populism.”

Renzi will be back

Despite his announced resignation the shrewd and young prime minister may well make a comeback in a few years' time, political scientist Béla Galló comments on blog site Mozgástér:

“Renzi has escaped the anti-reformist mood in society in order to use the predictable chaos following his departure for a triumphal return in the moral sense. In Italy a growing number of knowledgeable voices can be heard who are convinced that Renzi, who is regarded as a shrewd politician and is still very young, may be biding his time only to seize the next opportunity that comes his way. The circumstances are in his favour. Fortunately for him the opposition lacks a viable alternative to govern the country. And if a technocrat government takes over now he won't have to pay the price for the negative reactions to painful reforms.”

Italy's banks under scrutiny now

Now that the referendum is over the focus will shift to the ailing Italian banks, Hämeen Sanomat predicts:

“Just a few years ago an unclear political situation in Europe's third largest economy would have caused major political turbulence. This time the democratic vote didn't rock the markets. We have already seen this kind of reaction: after the Brexit vote we observed that uncertainty doesn't necessarily lead to stock market fluctuations. After this referendum it is clear that attention will turn to Italy's banking sector, which is described as weak. The reforms proposed by Prime Minister Matteo Renzi could have eased the recapitalization of the banks in line with market economy conditions, but that opportunity has now been missed.”

A helping hand can achieve more than pessimism

All the pessimism after the Italian referendum is uncalled for, Sme warns:

“Austria has just shown that things can also turn out better than expected. The Italian scenario doesn't have to have the same outcome as in Greece. Those who thought after the Brexit vote that the British would officially apply to leave the Union by the end of the year were also wrong. Renzi and the Socialists may have overestimated their strength, but they're not going to simply disappear from politics. ... Central Eastern Europe can also help Italy. For example we could stop talking about 'flexible solidarity' and actually lend a hand - by sending money, resources and aid workers to Italian refugee centres. We could also take in a few hundred asylum seekers. In that way we could help prevent the 'Italian crisis' from actually becoming a crisis at all.”

Ditched reform is good news

Europe should rejoice over the rejection of Renzi's reform, Berliner Zeitung writes:

“We're too quick to see things in an unnecessarily big context. The vote on Renzi's reform project has nothing to do with Brexit or Trump's victory in the US. But it does have to do with the fact that voters sometimes use the chance to defend themselves. And also to make mistakes. We should be happy that his proposal was rejected. Not because we are against reforms, but because we have learned that we must differentiate between them. Renzi's attempt to receive a mandate to govern just as he pleases has failed. The time has come to do what must be done without taking the people for fools or increasingly limiting their ability to influence political developments. In Italy and in Europe - especially in times of populism - we must accept the challenge: Dare to be more democratic!”

Renzi's reforms wouldn't have helped

“The result of the vote is good. Renzi's reform would have resulted in a dangerous concentration of power and wouldn't really have solved the country's economic problems. It doesn't make sense to see the Italian referendum as the populists giving the elite a slap in the face, as with Brexit or Trump's election - or at least not on that scale. … The per capita GDP is lower than in 1997 right now. Italy's main problems are high unemployment, banks holding toxic loans, a weak education system, low productivity owing to a lack of investment, low levels of education among women, a rigid and corrupt administration and to a certain degree the inflexibility of the labour market. … But Renzi's reforms wouldn't have provided a cure for any of these problems.”

The EU is losing key politician

The result could be fatal for the old continent, Rzeczpospolita believes:

“The spectacular defeat of Renzi's political reform poses an existential threat to the EU. Italy has barely changed in around a decade. And it is mired in debt. Nevertheless almost six out of ten voters prefer to rant and rail that their standard of living has declined instead of supporting the necessary reform measures. They voted for an exotic coalition thrown together by the populist Beppe Grillo, the billionaire Silvio Berlusconi, the separatist Matteo Salvini and the liberal professor Mario Monti. Moreover, this motley crew hasn't offered any alternatives. ... Italy's prime minister, by contrast, was one of the last EU leaders who advocated a federal Europe. He had even said he was prepared to cede further competencies to Brussels.”

Technocrats must once again rescue Italy

In the current situation Italy once again has only one option, Le Monde believes:

“In former times Renzi's downfall would have been just a blip in Rome's political history. The financial markets are nervous and Italy's ailing banks are weakening the euro. It would be catastrophic if Beppe Grillo came to power, but Italy has not come that far yet. It is, however, not possible to organise quick elections because there is no valid electoral system. For that reason Italy should resort to a technocratic government as it did with Mario Monti in 2011 after the fall of Berlusconi, and then with Enrico Letta when there was no clear majority after the elections in 2013. Italy does this too often, certainly. It's a symptom of a sick democracy. But in the short term it's the only solution short of falling back into the unknown.”

Renzi's risky referendum game

“Italy combines all the factors that have allowed populism to flourish: economic stagnation, rising poverty, a middle class in crisis, the loss of a sense of identity, a growing threat to security. It has now fallen prey to populist forces, from Beppe Grillo's Movimento Cinque Stelle to the Lega Nord. This spectre of populism haunted the referendum on December 4. That shows how big a risk Renzi ran in turning the referendum into a vote on his programme, and in announcing that he would resign if it failed. He has made himself the scapegoat for Italy's widespread malaise.”

A fatal blow for the EU?

“The Eurosceptic Five Star Movement and the right-wing populist Northern League are not allies but both fuel anti-system sentiment and call for 'national solutions' to Italy's problems - starting with a return to the lira. If new elections are called, the two may join forces and support a new government that could hold a referendum on Italy staying in the EU. And Italy leaving the EU could be a fatal blow for the EU project. … As in the UK and the US, 'change' is the magic word in Italy right now. But no one seriously wants to address the challenge of change. … 'Don't just change the constitution, change everything!' the No campaign demanded. But wanting to change everything is ultimately just a way to keep everything the same.”

A pageant of panic-mongering

The constant warnings of impending doom are exaggerated, also in the case of Italy, Jutarnji list comments:

“The Italian referendum was considered dangerous because it could bring the Italian government down. Such nonsense! As if this would be the first Italian government that had ever toppled. On the contrary, Renzi now belongs on the Italian system's long list of 'stable instability'. Yes, but if Renzi goes, the anti-European Beppe Grillo will take his place! they say. Oh really? And if things were different he wouldn't? Grillo would have come to power at the latest in the 2018 elections anyway unless something changes radically. So the whole circus is a creation of the panic-mongerers who - after the Greeks didn't leave the Eurozone and the EU didn't collapse after Brexit - rushed to put together another panic scenario before they move on to scaring us with Trump's move into the White House and Angela Merkel's political fate.”

The people long for security

The left-wing daily Il Fatto Quotidiano was one of the main opponents of the constitutional reform. Stefano Feltri, deputy director of the paper, sees the rejection of the reform as a triumph of the people, not of anti-politics:

“If we add up the votes of the two anti-system parties, Movimento Cinque Stelle and Lega Nord, we end up with just over 40 percent. The percentage of Italians who said No to the constitutional reform was, however, much higher. That shows that the rejection of the reform (or the rejection of Renzi) doesn't overlap with the extreme positions. … In a world that is growing ever darker and more uncertain the Italians have decided to seek refuge behind one of the few barriers that are still intact. Barriers that were set up to defend values that are now being called into question. Barriers that were built into the constitution, by scholars, by the popular religion that guarantees the cohesion of the state and society. Another reason for this defeat is that Renzi sacrificed the country's agenda for his own agenda.”